August 20, 2005

Whenever I speak of free markets, empowerment and liberalization to be the best solution to India’s poverty problems, I am almost always told that it is easy for me make armchair arguments. Have I ever experienced life in a village, the hunger, the desperation? How can someone who has been an urbanite all his life ever know what is good for the rural poor?

There are some basic flaws in this argument. The first one, I think it is somewhat presumptuous to merely go by my present attire and speech and lifestyle, and make conclusions about my economic history, especially for people who have known me for a few minutes, maybe a few months, or at the most a couple of years.

The more important flaw in the argument is that these very people suggest that some wise, know-all bureaucrat and regulator who has exactly as much or less knowledge or experience of hunger or poverty or the rural struggle for survival should sit in Delhi, and decide on which district gets how much of the centrally planned monetary allocation for that year to spend on “his” subjects. The whole argument reeks of hypocrisy. In my armchair “solutions”, at least I don’t presume that I am more intelligent than the poor farmer. I don’t underestimate his ingenuity to use his empowered mind to alleviate himself from his impoverished state.

And if I may add to that, I’d say that the very worst way to counter an argument is by questioning the credentials of the person making it. What does it matter whether an argument comes from a village or an armchair in a posh elite household, or even from a cow? Any argument must be examined on its own merits. Those who focus on the person instead of the argument are implicitly acknowledging their own inability to engage in a constructive discussion.

Arnold Kling had a short essay re the differences between what he calls Type M (focused on motives) vis-a-vis Type C arguments (focused on consequences) that is rather apt, in light of Amit & Sumeet’s commentshttp://www.techcentralstation.com/100703B.html

Excerpts

suppose I were to say, “We should abolish the minimum wage. That would increase employment and enable more people to climb out of poverty.”

There are two types of arguments you might make in response. I call these Type C and Type M.

A hypothetical example of a Type C argument would be, “Well, Arnold, studies actually show that the minimum wage does not cost jobs. If you read the work of Krueger and Card, you would see that the minimum wage probably reduces poverty.”

A hypothetical example of a Type M argument would be, “People who want to get rid of the minimum wage are just trying to help the corporate plutocrats.”
[..]
Do you see any differences between those two types of arguments?

I see differences, and to me they are important. Type C arguments are about the consequences of policies. Type M arguments are about the alleged motives of individuals who advocate policies.

In this example, the type C argument says that the consequences of eliminating the minimum wage would not be those that I expect and desire. We can have a constructive discussion of the Type C argument — I can cite theory and evidence that contradicts Krueger and Card — and eventually one of us could change his mind, based on the facts.

Type M arguments deny the legitimacy of one’s opponents to even state their case. Type M arguments do not give rise to constructive discussion. They are almost impossible to test empirically.

Its absolutely true that its wrong to condemn a post on perceived motives. Nevertheless, I do think that there is often a grain of truth in the accusation of armchair argumentation. As economists, or something of the sort, theory allows us some hooks into reality, but it should never be a substitute for empirical work (my own feeling is that economics nowadays has a lot more empathy for the latter-good thing too). From my little speaking with friends who have done extensive fieldwork in rural AP, many odd things that you wouldnt pick from a theoretical understanding of the place come up when you take a closer look. One quick example about microcredit. One researcher I know found that it heightened caste divisions in her village level study), and villagers feel the desperate need for state credit, given that the interest rates on microcredit are very high. Many other such stories….

Well, this is nothing new that people argue about your background instead of trying to understand the merit of your argument. What do you think what was all about “swift boat campaign” and Election 2004 in USA? Bush and his campaign machine precisely did that. So now it has become fashionable.

However, in this case of ways to improve the rural economy, there is one aspect – you do want to get those rural people involved in how do they want to improve their lives. Point is you want to make available the Capital, Technology and Process to them. What you want those people to decide is the ownership issue and how do they want to distribute the fruits among them. That is very contentious issue and frankly speaking it is THE Political Issue at work. Needless to say, at that point you want those rural communities to make their own calls – whether it is a Cooperative or Private or Public efforts, etc. And at anytime an advise of external party blurs this line and falls into the realm of ownership and distribution; it ruffles the feathers and paves the way for criticism.

Hi Amit
I agree that it is not good to critize an argument by critizing the commentator. However, I think Sumeet second point is well worth considering in more detail. He is saying that precisely because he is urbanite and doesn’t know much about the farm economy that he feels confident that the farmers, given full freedom to act on their own behalf, would do a much better job of extracting themselves from poverty than either Sumeet or any central planner could manage.

This is the genius behind free markets: a billion people trying to solve their own problems can out-think thousands of geniuses with access to the fastest super-computers. That is the real point here. And, of course, it a complete no-contest if the thousand geniuses decide that solving the problem of the billions of people in India really isn’t something they care to solve.